Directors of the collapsed firms said they could not comment on his call for an investigation.

Keith Stiles bought the hotel for £150,000 after an ambitious expansion plan, which he was involved in, failed.

The plan included building 200 eco-lodges on marshland near the hotel, but planning permission was refused by Carmarthenshire council in 2015.

The hotel was owned by Kayboo and operated by East Marsh Operational but both went into administration in October 2016 after they stopped paying the investors the returns they had promised.

Despite the value of the hotel and its assets, administrators decided the debts made it almost worthless and sold it to Glendore Real Estate, run by Mr Stiles, in order to protect the 60 to 70 jobs there.

Mr Hart said there were questions about whether investors knew there was a good chance planning permission may not be granted, as the site was on a floodplain and is a Site of Special Scientific Interest (SSSI).

"If the whole thing was sold, predicated on planning consent, there are big questions, because this was always going to be a big ask of the planners.

"I was in a meeting with [environment body] Natural Resources Wales and their arms were folded from the beginning," he said.

The MP for Carmarthen West and South Pembrokeshire has written to the UK government's Department for Business, Energy and Industrial Strategy asking it to look into what happened.

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Media captionButcher Huw Eynon said the impact of the £10,000 he is still owed is "punishing"

The project's investors have said they do not expect to get much of their investment back and nearby companies have also lost money.

Eynon's Butchers in St Clears is owed more than £10,000 for meat supplied before administrators were called in.

Huw Eynon said the company had continued supplying The Corran but on a cash-on-delivery basis.

"For a small family firm it's very punishing," he said.

"It leaves one with a sense of immense disillusionment and it might take us six to 12 months to recover from it."

Bakery owners Jemma Wyatt and Andrew Evans, who are owed £600, said they did not expect to get it back.

Mr Evans, who had to make a delivery to the hotel on the day of his son's birth, said: "I don't like letting people down so you just go above and beyond for people.

"And we thought we would get the same in return, but we obviously haven't."

The directors of Kayboo and East Marsh Operational, who include Mr Stiles, said the refusal of planning permission was unexpected and they would have met their financial obligations if their expansion plans had been passed.

They said they could not comment on Mr Hart's calls for an investigation.